Message-ID: <30168370.1075842435680.JavaMail.evans@thyme>
Date: Fri, 20 Oct 2000 02:47:00 -0700 (PDT)
From: drew.fossum@enron.com
To: mary.miller@enron.com, mary.darveaux@enron.com, glen.hass@enron.com, 
	dari.dornan@enron.com, kelly@gbmdc.com, sstojic@gbmdc.com, 
	steve.kirk@enron.com
Subject: Enforcement Call
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X-From: Drew Fossum
X-To: Mary Kay Miller, Mary Darveaux, Glen Hass, Dari Dornan, Frank Kelly@gbmdc.com, sstojic@gbmdc.com, Steve Kirk
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MidAm advised us they intend to call the enforcement hotline, probably today, 
to get enforcement staff involved in resolving the Carlton timing problem 
(i.e., the absence of an order approving or not approving the settlement).  
If Midam does so, Enforcement will then contact Northern for a 
response--probably Dari or MKM or I, but who knows who they'll call.
If they do, the following bullets are important to convey as our preliminary 
response to MidAm:

1.  Midam, and all of our customers, are aware that a Commission order on the 
June 2, 2000 Settlement is necessary before the precise flow obligation for 
this Nov-March period can be determined.  The flow obligation for sourcers 
like MidAm will be slightly higher--by about 3%--if the settlement is 
approved.  For all customers that have asked what the precise flow obligation 
numbers would be under the two scenarios, settlement approval or settlement 
non-approval, we have given that information.  We gave that information to 
MidAm also.  We can't file the tariff sheets setting out the specific number 
for this heating season until the Commission addresses the settlement.

2.  The true financial impact of the current uncertainty on MidAm is 
minimal.  We believe many of the sourcers have locked in their supply based 
on the lower flow obligation number, but with an option to increase their 
purchase quantity if the Commission approves the settlement.  MidAm may have 
done that, but we don't know.  If not, and if the Commission approves the 
Settlement, their only real "cost" would arise if they have to buy the 
additional flow obligation volume--about 1100 MMBtu/d for MidAm--now at a 
higher price than they would have paid if they bought it earlier when they 
locked up the bulk of their flow obligation supply.    Given the large drop 
in gas prices the last several days, there may not be any increased cost.   

3.  The bottom line is that we really need an order on the Settlement.  The 
majority of Northern's customers support it as a fair solution to the Carlton 
problem.  MidAm is the only opponent that has raised substantive issues.  
MidAm is clinging to a financial windfall it gets under the old Carlton 
mechanism and has no reason to oppose the settlement other than preserving 
that windfall.    


That's the end of the proposed script.  The last bullet may go to far, but I 
like it.  Frank and Steve, MKM suggested that you guys get Doering and Gorak 
and others to call FERC (hotline or otherwise--I don't think it matters) and 
express their concern that the order is not on the agenda.  DF